TY  - JOUR
AU  - Gokhale,Jagadeesh
AU  - Smetters,Kent
TI  - Measuring Social Security's Financial Problems
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11060
PY  - 2005
Y2  - January 2005
UR  - http://www.nber.org/papers/w11060
L1  - http://www.nber.org/papers/w11060.pdf
N1  - Author contact info:
Jagadeesh Gokhale
Senior Fellow
CATO Institute
1000 Mass. Ave., NW
Washington, DC 20001
E-Mail: jgokhale@cato.org

Kent Smetters
University of Pennsylvania
SH-DH 3303
3620 Locust Walk
Philadelphia, PA 19104
Tel: 215/898-9811
Fax: 215/898-0310
E-Mail: smetters@wharton.upenn.edu
AB  - The U.S. Social Security system has helped keep many retirees out of poverty. However, according to the Social Security and Medicare Trustees, Social Security faces a future financial shortfall of $10.4 trillion in present value. This enormous imbalance has received little attention in public debates about Social Security. Instead, the media and policymakers continue to focus on the program's trust fund and several other ad-hoc measures that create a misleading impression of the size of Social Security's financial problem. Although the Social Security Trust Fund is not projected to be exhausted until 2042, Social Security's $10.4 trillion present value imbalance is accruing interest and will grow by $600 billion during 2004 alone. The current cash-flow federal budget, however, is biased against reforms that would improve Social Security's finances. As shown herein, a new federal accounting system would remove this bias.
ER  -